[SPEAKER_01]: All right, everybody.
[SPEAKER_01]: We're back at the out-east summit sponsored by the tie.
[SPEAKER_01]: We're having a lot of fun.
[SPEAKER_01]: I've got a fantastic distinguished guest joining me today.
[SPEAKER_01]: Chris Jean Carlo, the former CFTC chairman.
[SPEAKER_01]: Chris, thank you for joining us on the show.
[SPEAKER_01]: Bryce, really good to be with you on this beautiful day.
[SPEAKER_00]: After all this rain, that's a nice morning.
[SPEAKER_01]: I know.
[SPEAKER_01]: We went from tornado warning yesterday to nice breeze.
[SPEAKER_01]: Beautiful sunshine.
[SPEAKER_00]: The breeze stays a breeze and then I think else.
[SPEAKER_01]: Yeah, well, look, we've got a lot to unpack with you, you know, former CFTC chairman, you know, you've really, you know, helped the space, I think you're, you're also known as crypto dad.
[SPEAKER_01]: So, you know, a lot of people think regulators, they make things really tough.
[SPEAKER_01]: You really helped open the doors for crypto, you wrote a book on it.
[SPEAKER_01]: So, I want to, you know, get our audience a little acquainted with who you are a little bit about what you've done at the CFTC before we kind of get into what you're doing now.
[SPEAKER_00]: You know, as you mentioned, my people reference me as former CMTC chair, but I spent 30 years in private industry before going and built a company GFI group that we eventually took public onto the New York Stock Exchange.
[SPEAKER_00]: A company that created marketplaces for market makers to engage in sophisticated trading of complex financial products, co-credit of all swaps.
[SPEAKER_00]: So my background really is in industry and in markets.
[SPEAKER_00]: And so I took that with me when I served in government.
[SPEAKER_00]: I was honored to be nominated by President Obama and then reappointed by President Trump to serve as chairman of the agency.
[SPEAKER_00]: And I think what I brought to it was an approach that said innovation isn't something to be feared.
[SPEAKER_00]: It's something to be embraced.
[SPEAKER_01]: Right.
[SPEAKER_00]: that the whole point of regulation is to move with the times and to bring regulatory frameworks that suit the new innovation, not the whole back innovation, but to go with it.
[SPEAKER_00]: And I've got a new book coming out, knocked over cold.
[SPEAKER_00]: The new adventures of Crypto Dad.
[SPEAKER_00]: Alright, I like it.
[SPEAKER_00]: In which I'm going to talk about where we left things at the end of the first Trump administration, where things seem to be going a little bit sideways during the Biden administration.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: And why we're now back to a regulatory environment that doesn't fear innovation, but actually looks to exploit innovation in a way that's consistent with orderly markets that's consistent with proper regulation, but it's not fearful of innovation is actually forward looking on innovation.
[SPEAKER_01]: I love it.
[SPEAKER_01]: I think the subtitle of your crypto dad book recalling for memory is the fight for the future of money.
[SPEAKER_01]: Yes, and I wrote book called crypto revolution your guide to the future of finance.
[SPEAKER_01]: And so we got a little play there.
[SPEAKER_01]: Yeah, both revolutionary fighting and spirit.
[SPEAKER_01]: What are you fighting for the future of money for right like is it for a great question.
[SPEAKER_01]: Yeah, go for it.
[SPEAKER_00]: Oh, that's a great question because the promise of this innovation.
[SPEAKER_00]: It's a new wave of the internet, right?
[SPEAKER_00]: Yes.
[SPEAKER_00]: It's the internet doing to things of value, what it's already done to things of information.
[SPEAKER_00]: And what did the first wave of the internet do?
[SPEAKER_00]: It made information far more accessible to the common person, right?
[SPEAKER_00]: It took information that was housed in libraries and encyclopedias and made it available on our mobile devices, right?
[SPEAKER_00]: Without a ton of intermediaries to get to it.
[SPEAKER_00]: this way that the internet is doing the same thing with things of value.
[SPEAKER_00]: It's making it regularly accessible.
[SPEAKER_00]: Think just think about stable coins.
[SPEAKER_00]: Stable coins allow people all over the world to opt into the monetary policy and the monetary system and the currency of their choice.
[SPEAKER_00]: Singo.
[SPEAKER_00]: Rather than having it dictated to them by their government.
[SPEAKER_00]: So it creates a democratizing force.
[SPEAKER_00]: The reason why I call it the fight for the future is the question of whether it will truly be empowering for the average person or whether hierarchies, new hierarchies will emerge.
[SPEAKER_00]: Just as it did in the internet, right?
[SPEAKER_00]: Yeah, with we want information, we go to YouTube, we go to AI.
[SPEAKER_00]: is it really truly accessible to us or is it once again controlled by new hierarchy?
[SPEAKER_01]: Yeah.
[SPEAKER_00]: And the same thing as the question here is will we trade government surveillance of our financial transactions for big tech surveillance of our transactions?
[SPEAKER_00]: Yeah.
[SPEAKER_00]: That's really the question.
[SPEAKER_00]: I think the genius act, which legalize stablecoins in many, many ways is a fabulous statement
[SPEAKER_00]: The genius act imposes the bank secrecy act, which is a surveillance law.
[SPEAKER_00]: It's not about secrecy.
[SPEAKER_00]: It's actually about making our out of secrecy.
[SPEAKER_00]: It's a secrecy.
[SPEAKER_00]: And it imposes that on this new innovation.
[SPEAKER_00]: So two steps forward, are we taking two steps back or one step back?
[SPEAKER_00]: Where are we moving here?
[SPEAKER_00]: And those are the things I address in my first book.
[SPEAKER_00]: But certainly you're addressing this new book.
[SPEAKER_01]: I love it.
[SPEAKER_01]: You know, kind of just to double click on the concept of, you know, we're subjected to a monastery policy in America.
[SPEAKER_01]: We're privileged.
[SPEAKER_01]: We're very privileged in crypto.
[SPEAKER_00]: In fact, the French coalition, the exorbitant, the exorbitant, the exorbitant, the exorbitant.
[SPEAKER_01]: And so we get the, you know, best monetary policy.
[SPEAKER_01]: And a lot of people when I talked to my friends are like crypto, like what do we need Bitcoin for?
[SPEAKER_01]: That's what the Federal Reserve is for.
[SPEAKER_01]: But it's like, you know, you got a credit card.
[SPEAKER_01]: You got access to a mortgage loan officer.
[SPEAKER_01]: You have access to these, you know, borrow lent facilities.
[SPEAKER_01]: You could swap.
[SPEAKER_01]: You could open a brokerage account.
[SPEAKER_01]: You could get any ETF in the world.
[SPEAKER_01]: But guess what?
[SPEAKER_01]: You're in the top 10%.
[SPEAKER_01]: And there's a 90% of the other world who doesn't have access to any of that.
[SPEAKER_00]: Well, let me, and that's what crypto is for.
[SPEAKER_00]: Exactly.
[SPEAKER_00]: You know, the existing financial system before we get into crypto.
[SPEAKER_00]: is all premised on one having credentialed identity.
[SPEAKER_00]: If you don't have credentials, if you're just Joe from the other side of the mountain, you cannot access the existing financial system because you do not have credentialed identity.
[SPEAKER_00]: You can access the cash system.
[SPEAKER_01]: You can access a low shark for 30% a month.
[SPEAKER_00]: But you can do cash transactions as well.
[SPEAKER_00]: You don't need identity to give somebody a $10 bill.
[SPEAKER_00]: But you can't access the current financial system, which is premised on that.
[SPEAKER_00]: the beauty of a tokenized digitally tokenized system is we may get back to it once again a system that doesn't require credentialed identity unless government step in and say not good enough for us I know because we want to know everything everybody's doing so they impose a credential identity and in the world of eight million people we're roughly a billion and have to do not have credential identity they're excluded from financial wherewithal
[SPEAKER_01]: Yeah, and their governments have these policies that are way worse than anything that we think, especially with inflation.
[SPEAKER_01]: We think, okay, back in the Biden administration, we have nine percent inflation.
[SPEAKER_01]: I remember that print and everybody was like, oh my gosh, this is horrible.
[SPEAKER_01]: But it's like, look at Argentina, look at some public hundreds of thousands of percentage points of inflation and right from
[SPEAKER_01]: And so yeah, it's just a crazy dichotomy, but I do want to die.
[SPEAKER_00]: That's the big thing about stablecoins.
[SPEAKER_00]: I think a lot of people miss the ability to opt out of those inflationary environments and choose a financial monetary policy and currency of your choice.
[SPEAKER_01]: Yeah.
[SPEAKER_01]: So.
[SPEAKER_01]: I'm so curious just to, you know, this is a great honor to have you on the show and like just get inside the conversations that you have with some of your other buddies right in DC where you're working some of your other buddies that you used to, you know, rub shoulders within Wall Street and like Chris you really doing the crypto thing like are they are they bought in yet is traditional, you know, financial folks.
[SPEAKER_00]: So look, I want to give a teaser to you already.
[SPEAKER_00]: It's for my new book and new adventures because it has these conversations today.
[SPEAKER_00]: in some of the White House meetings on this.
[SPEAKER_00]: I've set the scene for some meetings with other regulators, including during the Biden administration.
[SPEAKER_00]: I think I get to what made them tick when they announced an army against an anti-Critual army and a war against crypto.
[SPEAKER_00]: I think I get what but I also contains some real intimate looks at some of the characters of crypto.
[SPEAKER_00]: People like Sam Bateman Fried people like Shane Copeland, the inventor of Polymer.
[SPEAKER_00]: Yeah.
[SPEAKER_00]: And so I encourage your listeners.
[SPEAKER_00]: But let me give you a flavor for what I think drove some of the antipathy to crypto during those, those Biden was doing during the era on which I came into public life, the Reagan Revolution, which was based upon Milton Friedman and before that, the Austrian School of Economics, the belief was that in a society, the best way to allocate capital amongst members of that society was in a free market approach.
[SPEAKER_00]: that the market albeit not perfect would allocate capital in an efficient means.
[SPEAKER_00]: Well, coming out of the great financial crisis in 2008, an alternative philosophy that had been bumbling around, bubbling around, and now came in the full blue, and that says actually the free market stood a bad job of allocating capital, especially to certain discs that I got off the leash.
[SPEAKER_00]: the dog and and it didn't allocate capital to certain distant franchise groups.
[SPEAKER_00]: And therefore in order to get capital in an equitable fashion, or I might say an equity fashion, we need a political component.
[SPEAKER_00]: And in many ways, Dod Frank was the victory of Washington over Wall Street,
[SPEAKER_00]: What it said was going forward, Washington is now going to have a say in allocating capital.
[SPEAKER_00]: And you see that whether it's dictating who serves on the boards of directors, of financial firms, or certain allocations of capital with in banking relationships and others.
[SPEAKER_01]: And just to interject here, it almost seems ironic because the subprime mortgage was a Clinton sort of effort to get in and to put himself in and say, you know what, we're going to do subprime loans, right?
[SPEAKER_01]: And that was kind of the reason that Frank St. Let's roll the dice one more time.
[SPEAKER_00]: Very easy.
[SPEAKER_01]: The irony.
[SPEAKER_00]: But the irony, right?
[SPEAKER_00]: But what crypto does is it challenges both the notion of letting the market allocate capital and letting Washington allocate capital would crypto says is, if we get the algorithms
[SPEAKER_00]: We don't need to rely on individuals, any humans, right?
[SPEAKER_00]: We can allocate capital fairly in a way.
[SPEAKER_00]: The algorithms don't recognize race, color, religion, etc., etc., the algorithms that was just allocate capital.
[SPEAKER_00]: And so crypto is in a sense Silicon Valley challenging Wall Street and Washington on how crypto, Silicon Valley broadly written in just California.
[SPEAKER_00]: And so crypto is really a challenge to those and what my new book goes into is how is that going to resolve itself?
[SPEAKER_00]: What are we going to wind up with?
[SPEAKER_00]: Are we going to wind up with a reconciliation of power in big tech?
[SPEAKER_00]: Or are we going to completely democratize the allocation of capital?
[SPEAKER_00]: But I think the reason why I call this the fight for the future money reminding you call it the
[SPEAKER_00]: the guide to the future of finance, the question for everybody, I guess for our audiences, how does this get resolved?
[SPEAKER_00]: What comes out of this?
[SPEAKER_00]: And I take a peek at that my book by telling stories from the inside.
[SPEAKER_01]: I love it.
[SPEAKER_01]: Well, I'd be remiss if I didn't ask about prediction markets.
[SPEAKER_01]: I want to get your just high-level thoughts on prediction markets.
[SPEAKER_01]: And kind of color it with the CFTC's taking a big role.
[SPEAKER_01]: And how do you regulate these things?
[SPEAKER_01]: Because we've been having conversations all week about, you know,
[SPEAKER_01]: people could make a prediction market on anybody or anything and is that person then responsible for knowing what's out in the prediction market and doing or not doing what a prediction market says you know insider trading on prediction markets like what are your your high level views on this course actually i think the regulation piece is easy that's the easy piece of this uh we have long established going back to the
[SPEAKER_00]: that retail establishments are regulate the state level, markets are regulated at the federal level.
[SPEAKER_00]: Okay, casinos and sports books are not marketplaces.
[SPEAKER_01]: Right.
[SPEAKER_00]: The house sets the price.
[SPEAKER_00]: Right.
[SPEAKER_00]: Okay, if you walk into a casino, you don't get to say, I'll tell you what the odds are.
[SPEAKER_00]: No, the house sets the odds.
[SPEAKER_00]: If you go in a sports book, they tell you what the odds are.
[SPEAKER_00]: You can take the odds, you can leave the odds, but you can't make the odds.
[SPEAKER_00]: Okay, interesting.
[SPEAKER_00]: Those are retail establishments, those are regulate the state level.
[SPEAKER_00]: prediction markets are truly markets.
[SPEAKER_00]: The house doesn't set the odds.
[SPEAKER_00]: The house just puts forward a proposition.
[SPEAKER_00]: Right.
[SPEAKER_00]: The market participants set the odds.
[SPEAKER_00]: If you don't like the odds, you reset the odds.
[SPEAKER_00]: That's a marketplace that has to be regulated at a federal level, not just because that's what the law says, because as you know, it makes sense.
[SPEAKER_00]: Sure.
[SPEAKER_00]: Are we going to have 26 states regulate global marketplaces?
[SPEAKER_00]: They don't have the ability.
[SPEAKER_00]: The CFTC is long regulated, some of the world's biggest markets.
[SPEAKER_00]: The oil futures markets are global market, and the CFTC actively regulates it, and efficiently regulates it.
[SPEAKER_00]: So the issue of whether these should be regulated, federal state, is to me quite clear.
[SPEAKER_00]: If it's a market, it's federal.
[SPEAKER_00]: It doesn't matter whether it's a sports,
[SPEAKER_00]: Proposition doesn't matter whether it's an electoral app, Proposition doesn't matter whether it's a price, a proposition on the price of oil, the future price, if it's a marketplace, it's federal regulation.
[SPEAKER_00]: So to me, that's the easy part.
[SPEAKER_00]: What I would say is that, to me, these look a lot like Uber, when Uber came around and ride sharing, offered a challenge to ride hailing, that was restricted by local monopolies, local taxi and limousine monopolies, airport monopolies, county monopolies.
[SPEAKER_00]: And what happened was the American people said, but I really like this ride hailing thing.
[SPEAKER_00]: And the fact that you tell me I can't get one from this airport, I can only get a ride hailing,
[SPEAKER_00]: And so, after a while, those monopolies were broken down.
[SPEAKER_00]: And what do we have today?
[SPEAKER_00]: We actually have both ride handling and ride shailing, sharing the served different marketplaces, and they coexist.
[SPEAKER_00]: Yeah.
[SPEAKER_00]: I think we're going to see the same thing in prediction markets.
[SPEAKER_00]: the states and their casinos and their sports books have had at least the sports element to themselves and they're saying wait a minute you can't do this because we're protected by casino and gambling commissions at the state and the county and the tribal level and we're going to fight you all the way to Congress.
[SPEAKER_00]: But what's going to happen is the American people are going to say you know what but we like this.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: You can't take this away.
[SPEAKER_00]: We want it.
[SPEAKER_00]: And when that happens, these things are going to break down and guess what?
[SPEAKER_00]: We're still going to have the casinos because the casinos make 90% of their money on the one-armed bandits.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: Okay.
[SPEAKER_00]: We're still going to have sports books because people like sports books.
[SPEAKER_00]: Yes.
[SPEAKER_00]: They offer different parallels and other things.
[SPEAKER_00]: But we're also going to have prediction markets.
[SPEAKER_00]: And here's why we're going to have prediction markets.
[SPEAKER_00]: because people want certainty.
[SPEAKER_00]: Yes.
[SPEAKER_00]: The same reason that I checked the weather report today before coming to this thing and I'm not wearing a raincoat because it's sunny out.
[SPEAKER_00]: People want predictability and we're interest rates going.
[SPEAKER_00]: We're gas prices going and these prediction markets have shown they've got about 90% accuracy.
[SPEAKER_01]: Yeah, predict which hour.
[SPEAKER_00]: Which is the same accuracy as the weather report.
[SPEAKER_00]: Yeah.
[SPEAKER_00]: And so people are going to like this idea and what they like it.
[SPEAKER_00]: They're not going to be held back by these local monopolies.
[SPEAKER_00]: And eventually the local monopolies are going to figure out, you know what this room for everybody.
[SPEAKER_00]: They'll make their money and so will prediction markets and I think there's no turning back.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: The question is, is whether the leaders of these organizations, these founders, these young founders that have built great franchises, have the ability and not every founder does.
[SPEAKER_00]: I've seen this, you know, I took a company from almost startup to IPO, not every CEO has the ability to both create a great idea, build a marketplace and then transition into a
[SPEAKER_00]: things on the rails.
[SPEAKER_00]: And I think we'll see how this evolves, but this product is not going away.
[SPEAKER_00]: This industry is only going to grow and we'll see how the leadership evolves to go grow within and CFTC will remain the regular.
[SPEAKER_01]: Absolutely.
[SPEAKER_00]: CFTC's have very good regular.
[SPEAKER_00]: I mean, I would argue too.
[SPEAKER_00]: It was important as a stock market is far more important is the interest rate bond markets.
[SPEAKER_00]: You were treasury futures markets.
[SPEAKER_00]: So far more important is the dollar-based oil market.
[SPEAKER_00]: Is it the bedrock of the bedrock of every dollar's time to see as the world's reserve currency and they're all regulated by the CFTC.
[SPEAKER_00]: Yeah.
[SPEAKER_00]: And by the way, in 2008, not a single CFTC regular entity fails.
[SPEAKER_00]: Wow.
[SPEAKER_00]: Right.
[SPEAKER_00]: How many in the SEC world, Fag's failed many.
[SPEAKER_00]: Right.
[SPEAKER_00]: So the CFTC knows what it's doing is a very good agency and I think it's going to do just fine.
[SPEAKER_01]: Awesome.
[SPEAKER_01]: Yeah, I completely agree.
[SPEAKER_01]: And I was going to end with this question, but I'm going to bring it forward because it's relevant to the conversation we're having right now.
[SPEAKER_01]: I got so many more of my head.
[SPEAKER_01]: So it's great.
[SPEAKER_01]: Look, so prediction markets predictive, predictive accuracy, clarity act odds have been, you know, started the year 80% you know, I'm going here now.
[SPEAKER_01]: There's 30% yesterday today.
[SPEAKER_01]: They're 40%.
[SPEAKER_01]: So,
[SPEAKER_01]: It seems like the market doesn't have a good grip, really, on what it's doing, on what's going to happen.
[SPEAKER_01]: There's three kind of hangups, the ethics, the yield and the defy provisions.
[SPEAKER_01]: I don't want to put you on the spot with saying, is it going to pass?
[SPEAKER_01]: It's not going to pass, but I just want to open it up for you on your general thoughts.
[SPEAKER_01]: When you talk to clients, when you talk to people, how do you frame the clarity act?
[SPEAKER_01]: Is this happening?
[SPEAKER_00]: I've been rubbing
[SPEAKER_01]: No prediction.
[SPEAKER_00]: No prediction.
[SPEAKER_00]: Here's what I was in film and Terry.
[SPEAKER_00]: It doesn't matter as much as people think.
[SPEAKER_00]: I gave anything we've made too big of a deal.
[SPEAKER_00]: That's a hot take.
[SPEAKER_00]: I like that.
[SPEAKER_00]: If Crypto, if the Clarity Act doesn't pass, the world goes on.
[SPEAKER_00]: The internet all changed the world in the last 30 years and there was no authorizing statute.
[SPEAKER_00]: Oh, I didn't know that.
[SPEAKER_00]: Right.
[SPEAKER_00]: If we don't get a Clarity Act?
[SPEAKER_00]: These innovations are gonna happen anyway.
[SPEAKER_00]: First of all, Wall Street is all in.
[SPEAKER_00]: There's no turning back on what DTC sees doing what Franklin Templeton is doing.
[SPEAKER_00]: All of this is gonna go forward whether clarity asses or not.
[SPEAKER_00]: Mike C. League at the CFDC and Paul Ackon said the S.C. are not going anywhere.
[SPEAKER_01]: They're gonna be like, they've got stuff loaded in the hopper.
[SPEAKER_00]: Oh, maybe I'm just gonna say into the last day of the Trump administration.
[SPEAKER_00]: We've got two more years of this to run.
[SPEAKER_00]: More when that they're gonna do what they're going to do, whether clarity passes.
[SPEAKER_00]: This is not going away.
[SPEAKER_00]: And if the pendulum fully swings for two years from now and suddenly Elizabeth Warren is going to be present, she's not going to rip this out of the ground.
[SPEAKER_01]: It's going to be too built in.
[SPEAKER_00]: In fact, her wing of the party is already moved on from anti-crypto anti-AI.
[SPEAKER_00]: They love it, I found a new target for their desire to stop all progress.
[SPEAKER_00]: It's now AI, crypto is too ingrained, so all of this is going to happen, builders out there keep building, if this doesn't pass, it's not the end of the world, it the world goes on.
[SPEAKER_00]: The third way the internet is coming, it's here, it's not going back, we're already moving on.
[SPEAKER_00]: So I hope it passes, I think there's some good things in it, one of the things that
[SPEAKER_00]: is the grounding and law of something I started at the CFTC, which is lab CFTC, which is an end of, I think every federal regulation, every federal regulator, whether it's finance or technology or agriculture, or to have a lab inherent in it for innovation with experts.
[SPEAKER_00]: And with experts, so I hope this passes, there's a lot writing on, but the end of the eight it's not the end of the world if it does it, and it very well may not pass.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: And we'll be back here next year talking about all the new innovations that are coming
[SPEAKER_01]: Totally.
[SPEAKER_01]: So this is great.
[SPEAKER_01]: The, you kind of hit on Wall Street, that's where I want to take things next because Morgan Sandley's here, Fidelity's here, Invest goes here, Templates and Sponsored this.
[SPEAKER_00]: Can't talk.
[SPEAKER_00]: Actually, a sponsor.
[SPEAKER_01]: Exactly.
[SPEAKER_01]: And so we've got so many Wall Street heavy hitters, and they're all here, but they're not talking about crypto.
[SPEAKER_01]: They're talking, and we've had conversations in these seats, they're talking about digital assets or tokenization.
[SPEAKER_01]: And so I wanted to kind of get across a loaded
[SPEAKER_00]: phrase, so it's smart to replace it with digital assets.
[SPEAKER_00]: I use crypto as the shorthand for all of it, for digital networks of value with tokens on those networks, right?
[SPEAKER_00]: But what we're seeing right now is crypto moving away from a funky new alternative asset class into crypto is really architecture, architecture for the financial system.
[SPEAKER_00]: There was a time, you're too young to remember.
[SPEAKER_00]: I'm old enough to remember.
[SPEAKER_00]: When all photographs were on film, and you took a photograph and you showed it to your friends and they went into a photo album and you never looked at it again, right?
[SPEAKER_00]: Now you take a photograph and it lifts.
[SPEAKER_00]: You can do things when you get posted to social media.
[SPEAKER_00]: You can send it to your parents.
[SPEAKER_00]: You can change it.
[SPEAKER_00]: You can do things with it, certainly.
[SPEAKER_00]: It lives on your phone every time you go out you show people these photographs photography was changed by an internet By moving it from a single analog photograph onto a digital network.
[SPEAKER_00]: Yeah, that's just a microcosm for what's gonna happen with value Your things of value are gonna move out of some bank vault now onto your mobile device You're gonna be able to do things with a business
[SPEAKER_00]: this innovation, this revolution, this new architecture is very, very powerful.
[SPEAKER_00]: We're going to look back 15 years from now and say, it's changed everything and it is going to change everything.
[SPEAKER_00]: So folks don't get too hung up or whether cloudy passes or not because it doesn't matter.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: And it'll matter in the short term.
[SPEAKER_00]: It will it'll make the United States fully ahead of the rest of the world.
[SPEAKER_00]: But ultimately, this wave is coming.
[SPEAKER_00]: There's no turning back.
[SPEAKER_01]: Yeah, our people ready for it are people ready for the responsibility of self-custity.
[SPEAKER_01]: Are they ready to, you know, remember their seed phrases and not rely on, you know, their middlemen?
[SPEAKER_00]: Well, probably many are not, but here's the beauty.
[SPEAKER_00]: You know, now choose to have a middleman.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: As opposed to be forced to have a middleman.
[SPEAKER_01]: That's beauty.
[SPEAKER_00]: So if you want to do it yourself, you can do it yourself, what you could never do before.
[SPEAKER_00]: You want to move money yourself, you can do it.
[SPEAKER_00]: I recently bought some wooded farm land up in Vermont.
[SPEAKER_00]: And thank you.
[SPEAKER_00]: And I was in New York in that morning for a meeting.
[SPEAKER_00]: I called my banker at Nautoclock.
[SPEAKER_00]: I said, the deals close, wire the money at 2 p.m.
[SPEAKER_00]: I'm still getting calls from the lawyer in Vermont and the seller is sitting there waiting for their money to arrive.
[SPEAKER_00]: And if ridiculous and you know what chasing did the where the wire go what what you know That's the system we have today.
[SPEAKER_00]: It's a nightmare in the same time zone imagine trying to move that money to to Tokyo Right, I'm moving to Singapore.
[SPEAKER_00]: You know what it's like three days if you're sure if a future which that money I would have moved in a second.
[SPEAKER_00]: I would have said we're close boom.
[SPEAKER_00]: Here's the TX ID done done so in your wallet This is gonna change everything we know about how we record who owns what yeah, and who's transferring what to who?
[SPEAKER_01]: That seems like what it's really what the Wall Street guys that I'm talking to are all really excited about to say, look, brace, we have five guys that are reconciling and then there are five guys are reconciling.
[SPEAKER_01]: We're sending passing back and forth spreadsheets, you know, we're checking the tape.
[SPEAKER_01]: It's like at the end of the day, you're going to be able to settle tea on the day.
[SPEAKER_01]: There's no T plus one T plus two and that's that's a really, really powerful concept.
[SPEAKER_00]: You know, whenever you go from analog to digital, you leave behind those physically required tolerances and gaps.
[SPEAKER_00]: And in a digital system, you choose your own tolerances.
[SPEAKER_00]: So we may choose to go 237.
[SPEAKER_00]: We may choose to go 235.
[SPEAKER_00]: We may choose to go 245.
[SPEAKER_00]: But we can choose that.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: You know why the standard 7th time for security's transaction used to be three days?
[SPEAKER_01]: I don't.
[SPEAKER_00]: because standard delivery of U.S. mail was three days.
[SPEAKER_01]: Hey, you got to be getting no.
[SPEAKER_00]: So we chose to mail stocks or typical things to chose to settle our securities transactions based on the limitations of putting them in the mail and setting that that's crazy.
[SPEAKER_00]: Right.
[SPEAKER_00]: So our our our our our system our architecture was built upon physical limitation last.
[SPEAKER_00]: Once we go to a digital system, we're no longer bound by those physical limitations.
[SPEAKER_00]: Now, we may choose a one hour break at the end of the day, but we choose it.
[SPEAKER_01]: Yeah.
[SPEAKER_00]: And the same thing is true about people's custody of their things of value.
[SPEAKER_00]: You may choose to have a middleman who knows your seed phrase.
[SPEAKER_00]: It can give you the password if you forget it and all those things.
[SPEAKER_00]: Yeah.
[SPEAKER_00]: But you're not required to do it because of physical limitations.
[SPEAKER_00]: Yeah.
[SPEAKER_00]: You can choose to do it yourself.
[SPEAKER_00]: That's the democratizing power of this technology.
[SPEAKER_01]: I love it.
[SPEAKER_01]: Well, you've been very generous with your time.
[SPEAKER_01]: I've got one final question.
[SPEAKER_01]: It's another hot topic, perpetual futures, right?
[SPEAKER_01]: I know this is directly in your lane.
[SPEAKER_01]: You were actually residing in 2017, December when the Bitcoin futures contract first started trade on the CME.
[SPEAKER_01]: And so now we've got these new products called perpetual futures.
[SPEAKER_01]: They're basically like futures that just never have a role.
[SPEAKER_01]: They never expire.
[SPEAKER_01]: And, you know,
[SPEAKER_01]: Are you a fan of these?
[SPEAKER_01]: Do you think, I mean, I'm sure that you, there's so many perfect example of what I was saying before.
[SPEAKER_00]: The reason why futures markets had a settlement date is because they came out of the grain markets and at some point the grain was in the barn.
[SPEAKER_01]: Yeah, and it had to move.
[SPEAKER_00]: And at some point the growing season was over.
[SPEAKER_00]: The volatility is over.
[SPEAKER_00]: Now the grain could be sold and so you had a price.
[SPEAKER_00]: Okay.
[SPEAKER_00]: So the notion of dated future.
[SPEAKER_00]: Fated futures grew out of the physical limitations of physical delivery.
[SPEAKER_01]: But those don't stop.
[SPEAKER_00]: right there's still gonna be we still have physical limitations so do perpetual futures fit that they can't so we will have both physically settled markets we will have cash settled markets we will both have in-date markets and we will have for those who cheese choose it to have perpetual got it and date markets the safety see can regulate this is not complicated I mean it it from a surveillance point of view it presents new challenges see if dc's got this yeah
[SPEAKER_00]: There's nothing in the CFTC's laws or regs that require an end date.
[SPEAKER_00]: So there's no reason why they can't do it.
[SPEAKER_00]: The issue is going to be around what do you do about retail, how do you provide retail print as they always are.
[SPEAKER_00]: And another reason why this has to be regular at the federal level.
[SPEAKER_00]: You need one set of regulations.
[SPEAKER_00]: You can't have 26 or 28 or 35 or 50 different states regulate this has to be done.
[SPEAKER_00]: And the CFTC's got the expertise to do it.
[SPEAKER_01]: I'm excited for this future.
[SPEAKER_01]: No biggie.
[SPEAKER_01]: Yeah.
[SPEAKER_01]: No biggie.
[SPEAKER_01]: No sweat off, Mr. C. Woods back.
[SPEAKER_01]: He's got it.
[SPEAKER_01]: Mr. Giancarlo.
[SPEAKER_01]: Thank you so much for your time.
[SPEAKER_01]: You've been quite an airy generous.
[SPEAKER_01]: Everybody was watching here at the outie summit.
[SPEAKER_01]: Stay tuned.
[SPEAKER_01]: We've got some more great guests coming.
[SPEAKER_01]: Enjoy the rest of your trip.
[SPEAKER_01]: My pleasure.
[SPEAKER_01]: Good to be here.